This is on the back of strong financial returns for EPFO this year, including its investments in equity, and almost negligible Covid withdrawals, sources told ET.
The central board of trustees of EPFO, headed by the labour and employment minister Bhupender Yadav, gave its go ahead to the proposed interest rate at the 235rd board meeting of EPFO on Saturday.
The interest rate would be officially notified after approval from the ministry of finance, following which EPFO would credit the rate of interest into its subscribers’ accounts, in the later part of the coming financial year.
The interest rate of 8.25%, once notified, will be applicable on voluntary provident Fund (VPF) deposits as well. Further, exempted trusts are also bound to credit the interest at the same rate as EPFO to its employees.
The Employees’ Provident Fund is a mandatory contribution for salaried employees in organisations with 20 or more workers. Under the EPF&MP Act, an employee contributes 12% of his wages to the EPF account on a monthly basis and a matching contribution is made by the employer.While the employees’ full contribution is deposited to the EPF account, only 3.67% of the employer share is deposited to the EPF account and the balance 8.33% goes towards the Employees Pension Scheme (EPS).
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